Hi everyone,

as shared in my first post here, I built a house back in France 4 years ago, total cost 250k€, today it would sell about the same price, excluding agency fees and taxes. Reason for buying the house initially was to live in it for an indefinite number of years (and not at all to be used as a rental property), but I got offered the opportunity to move abroad for work which I couldn't decline because it was my dream.

We decided to keep the house and rent it out as it was "less catastrophic" than selling it for a major loss and also because we were proud of the work we put and the result we had.

Today, my cashflow is negative by 400€, the only value I'm getting is the mortgage repayment at this stage, but we're only keeping it because of its "sentimental" value, and an eventual use for our retirement.

This was my first real estate investment, since then, lessons have been learned about buying and anticipating future value and cashflow, which we did with an apartment in Ireland (bought it, refurbished, lived in it, and now positive cashflow of 500€).

What are your thoughts on this? Has anyone been in the same case? What did you learn from it?

Thanks a lot,

Baptiste

@Baptiste Pichon don’t keep a house for sentimental reasons. Take some pictures and sell it to someone who will enjoy it as their own home.

If you can sell for about break-even, do it. There’s no reason to pay someone else to rent it. At some point, you’ll have repairs to do, and then you’re just repairing someone else’s house.

Originally posted by @Mike McCarthy :

@Baptiste Pichon don’t keep a house for sentimental reasons. Take some pictures and sell it to someone who will enjoy it as their own home.

If you can sell for about break-even, do it. There’s no reason to pay someone else to rent it. At some point, you’ll have repairs to do, and then you’re just repairing someone else’s house.

Thanks Mike, why do you selling as the best option? I know cashflow is negative but I won't be scaling properties with negative cashflow. I'm looking more at keeping house long term and selling it with increase in value + mortgage repayment, so still making more money than selling it today breaking even?

I made the calculations with taking into account mortgage repayment and after total house repayment, including only mortgage repayment I'd be making 600€ per month (including the negative cashflow and all other aspects).
What do you think? You looking more at negative cashflow over long term that could be reinvested in cashflow-positive property?

@Baptiste Pichon

Investments don’t have feelings. This is a numbers decision. That’s it. If the numbers work, keep it. If they don’t, sell it or figure out a different strategy that’ll make the numbers work.

@Baptiste Pichon   If you won't be moving back any time soon, I'd sell it.  You can then use that money for something else and when you are closer to retirement, but your new dream home.  While you may break even, remember it was your home for a number of years (ie you didn't have to pay rent) and you've paid down some of the mortgage on the home.

Originally posted by @Baptiste Pichon :

Originally posted by @Mike McCarthy:

@Baptiste Pichon don’t keep a house for sentimental reasons. Take some pictures and sell it to someone who will enjoy it as their own home.

If you can sell for about break-even, do it. There’s no reason to pay someone else to rent it. At some point, you’ll have repairs to do, and then you’re just repairing someone else’s house.

Thanks Mike, why do you selling as the best option? I know cashflow is negative but I won't be scaling properties with negative cashflow. I'm looking more at keeping house long term and selling it with increase in value + mortgage repayment, so still making more money than selling it today breaking even?

I made the calculations with taking into account mortgage repayment and after total house repayment, including only mortgage repayment I'd be making 600€ per month (including the negative cashflow and all other aspects).
What do you think? You looking more at negative cashflow over long term that could be reinvested in cashflow-positive property?

 

It appears you already did your own math and even gave details not in the first post. 

Why would the house only sell for what it cost to build? Is the area depressed financially? And if it's not worth more now, why do you think it will be worth more later?

@John Teachout that's a good question.

I guess including all the costs associated to building the house today increased the cost but that's what usually happens on SFH in France just after building they're only worth what they costed. We just have some equity in it that will make us break even if we sell.

Regarding future value, it is near a city that is expanding massively so I plan an increase in value.

@Account Closed

Hey Joel, sorry I didn't quite get what you are saying